Motorola's revenue for the fourth quarter rose to $8bn, compared with $7.7bn for the same period the previous year.
Revenue rose 17% from the previous quarter.
Chairman and chief executive Officer Ed Zander, who took office earlier this month, said his priorities included attacking costs within the company, branding, and improving product quality and delivery in the handset business. Motorola now has three separate suppliers for some critical handset components.
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Motorola shipped 22.4 million handsets in the quarter, up 10% from the previous quarter and 1% from the previous year, while introducing 21 new products.
The average selling price of a handset fell by 2% from the previous year but up 4% from the previous quarter as the company shifted toward camera phones and UMTS (Universal Mobile Telecommunications Service) phones. Motorola expected sales to grow 20% to 25% this quarter.
Motorola's semiconductor product business, which is to be spun off as an independent company, returned to profitability in the quarter. The Global Telecom Solutions Segment, which makes carrier network gear, showed financial improvements across the board, while the Commercial, Government and Industrial Solutions Segment of the business had higher sales boosted by "homeland security" initiatives.
The greatest growth potential for this segment is outside the US. Motorola recently won a contract to supply a radio system for public safety services during the 2004 Olympic Games in Athens.
Motorola, which earlier this month signed contracts worth more than $1bn with telecommunications carriers in mainland China, aims to go into the China market aggressively with all its divisions.
For its full fiscal year, the company reported revenue of $27bn, down slightly from about $27.3bn in 2002.
Motorola's guidance for the first quarter of 2004 calls for revenue of between $6.4bn and $6.8bn.
Stephen Lawson writes for IDG News Service